(Formally known as Education IRA)

In 1998, the Internal Revenue Service introduced the Education IRA, which was renamed in 2001 to honor the late Paul Coverdell, former senator from Georgia. Education IRAs were created to help individuals save for a child’s higher education expenses.

You may establish an Education IRA on behalf of a minor under the age of 18 if your income does not exceed $110,000 if you are single or $220,000 if you are married. Members may contribute up to $2,000 annually per child. Withdrawals of earnings and contributions are tax free if used for higher education expenses. All funds must be completely distributed by age 30.

The SchoolsFirst FCU Coverdell Education Savings Account is a certificate that offers a fixed-rate of return for a specified term, and deposits are federally insured by the National Credit Union Administration, up to $100,000—see features and rates.

Your credit union also offers additional Coverdell Education Savings Accounts with investment options, which are not federally insured.